The Management Board of the Volkswagen Group has communicated a plan to reduce the number of models it markets by around 50% and the "complexity of the offering --such as the number of available configurations and equipment-- by up to 75%, with the aim of "concentrating investments and resources" on products "that provide greater added value to customers and the greatest value contribution to the Group".
In the meeting held this Thursday, the company presented the Supervisory Board with a "comprehensive package of measures" consisting of 12 initiatives, along with "the strategic vision for 2030", as detailed by the manufacturer in a statement.
Among the planned actions, "with immediate effect", are "the reduction of complexity and variant complexity of the product portfolio", "greater alignment of products, technologies and development with regional markets", "the adjustment of production network capacities to market expectations" and "the simplification of structures and the portfolio of holdings".
Likewise, the Group will integrate its main technological areas, electronic architectures and software platforms to "satisfy" the specific needs of the Western and Eastern markets, with decisions aimed at "more effectively realizing synergies across the Group, eliminating parallel technological structures and further strengthening technological leadership".
In this regard, Volkswagen will reduce the annual volume of vehicles produced to adjust it "to demand", going from around ten million to nine million units, a reduction that is in addition to the two million cars it has stopped manufacturing since the pandemic. At the same time, the company emphasizes that "development functions" will be "more efficient", while "digitalization, artificial intelligence and shared services" will increase "productivity" and "lighter management structures will simplify decision-making processes".
The Group will focus on "automotive" and will systematically review its "portfolio of holdings and investments" based on "its strategic contribution", "its profitability" and "the capital committed", with the intention of achieving greater "focus", "less complexity" and more "financial flexibility".
A recent case is the operation closed at the end of June to sell the majority stake in "Everllence", a transaction that "will contribute 7.4 billion euros in cash", according to Volkswagen.
The multinational maintains that the technological renewal objectives and performance improvement programs driven in the last three years have been "met" even "ahead of schedule" in "some cases", despite "geopolitical tensions". However, it warns that in the last year "the world situation has changed drastically", with "rising costs, especially due to tariffs", greater "regulatory demands" and increasingly "intense" international competition.
All of this, the company emphasizes, has "aggravated the challenges facing the automotive industry". For this reason, it considers that the new package of measures will place the Group "in an even more resilient position" and will also contribute "to the future of Germany as an industrial location".
"Our goal is clear: by 2030 we will transform the Volkswagen Group into the most attractive automotive company in the world: with iconic brands, inspiring products, leading technologies, strong financial results, reliable capital market performance, and a team spirit in action," said Oliver Blume, CEO of the Volkswagen Group.